PNB plans to raise Rs 7000 crore from QIP in December, credit growth to be less than 5% 

Punjab National Bank (PNB) on Tuesday mentioned it’s planning to lift Rs 7,000 crore by way of share gross sales subsequent month to shore up its capital base for assembly enterprise plans.

The nation’s second largest state-owned lender expects the credit score progress to select up barely within the second half however it could be lower than 5% for all the fiscal.

The financial institution has already taken approval from the board for elevating Rs 14000 crore by the use of Tier II, Additional Tier 1 (AT-1) bonds and QIP (Qualified Institutional Placement), PNB Managing Director S S Mallikarjuna Rao mentioned in a digital interplay with the media.

“Of this, Rs 4000 crore is for Tier II. Against this, we have raised Rs 2500 crore, and remaining Rs 1500 crore and additional Rs 3000 crore from AT-1 bonds will be raised before November 30. With respect to QIP of Rs 7000 crore, we are planning to go to the market in the second or third week of December. It would depend on the book running lead manager (BRLM) and roadshows,” he mentioned.

With this fund mobilisation, capital-to-risk-weighted property ratio, which was at 12.8% on the finish of September 2020 quarter, would go as much as 13.5-14%.

“With respect to unlocking value in subsidiaries, as on today we don’t have any plan. We will be looking at proposals in future if anything is required. We are adequately capitalised,” he mentioned.

On the opposite avenues of fund mobilisation, he mentioned, the financial institution is seeking to increase Rs 500 crore from sale of actual property in the course of the present fiscal.

He additionally mentioned the financial institution has determined to infuse Rs 600 crore in its mortgage arm PNB Housing Finance by way of preferential concern or rights concern topic to Reserve Bank of India (RBI) approval.

On the restoration entrance, Rao mentioned the financial institution is aiming about Rs 16000 crore for this fiscal conserving in thoughts the pandemic’s influence.

In the primary half of the present fiscal, he mentioned, the financial institution has accomplished money restoration of Rs 3200 crore and one other Rs 5000 crore is to be made by March 2021.

Besides, he mentioned, the financial institution is anticipating Rs 8000 crore from the decision instances earlier than the National Company Law Tribunal.

Asked concerning the outlook for the present monetary 12 months, Rao mentioned, the financial institution goals to earn average revenue in each quarter.

“We like to be in profit in every quarter though moderately. We do not like to have high profit because we want to strengthen the balance sheet by creating more and more provisions by showing marginal profits,” he mentioned.

The financial institution posted a revenue of Rs 308 crore in June quarter which elevated to Rs 621 crore within the second quarter.

With respect to credit score progress, PNB chief mentioned it needs to be 4-6% within the second half however the annual progress needs to be round 3-4% in 2020-21.

Deposit progress, he mentioned, could be 4-6% within the present fiscal and the financial institution was aware in controlling deposits.

The financial institution was having extra liquidity of Rs 30000-32000 crore as deployment alternative was muted in the course of the first half as a result of lockdown, he mentioned, including, with festive season setting in there are alternatives in retail, MSME, street and company initiatives.

Position with respect to deposit accretion will likely be reviewed in the course of the third quarter based mostly on deployment alternatives, he mentioned.